Commodity trading giant Trafigura mulls London float of Puma

Michael Bow is a reporter at City A.M. covering private equity, funds, investments and asset managers. He can be reached on michael.bow@cityam.com

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Michael Bow

COMMODITY trading giant Trafigura is mulling plans to join its Swiss-based rival Glencore and float part of its business on the London Stock Exchange.

Trafigura, a top three oil trader and the second biggest metals trader behind Glencore, yesterday said it was still weighing up an initial public offering of its oil subsidiary Puma Energy to bring new investment into the firm.

Puma Energy’s chief executive Pierre Eladari has made no secret of his desire to tap public markets and last year said the firm wanted to be in place to list by the end of 2012.

“We want to be ready a year from now,” he said in September 2011.

Yesterday Puma Energy, which is 65 per cent owned by Trafigura, said a listing, which bankers believe could raise up to £3bn, was on the cards for the future but had no urgent plans to move for a float.

“As we have stated previously, an IPO could be one of various options at some point in the future,” it said in an emailed statement yesterday.

It added that the firm was “well funded by its existing shareholders” and had “no immediate needs” to go public.

Trafigura originally rose to public prominence in 2009 after taking out a super-injunction to ban publication of details surrounding the alleged dumping of toxic waste in the Ivory Coast.

The Geneva-based firm loosened its grip on Puma Energy, which deals in oil storage and has a raft of petrol stations in the developing world, after selling a 20 per cent stake to the subsidiary of Angola’s state backed oil company Sonangol Holding last year.

It is understood the business is looking to cut its holding in Puma Energy below the 50 per cent mark, by drawing private investors to invest in the company. The other 15 per cent is owned by the partners at the business.

One headwind for Trafigura and Puma Energy will be the dire state of the European IPO markets, with volumes this year a third of what they were in 2011, according to Bloomberg data.

Despite the dismal state of the market, the firm’s key rivals have been successful in tapping investors for fresh funding.

Trafigura’s Swiss neighbour Glencore floated in London last year and pushed on by undertaking a mega merger with miner Xstrata this year.

Its other main rival, energy trader Vitol, sold a 50 per cent stake to a company owned by Malaysia’s national oil business Petronas.